Yesterday UEFA published the fifth edition of The European Club Licensing Benchmarking Report which covers the financial year 2011. On the eve of the full implementation of Financial Fair Play (FFP) it makes pretty interesting reading.

Essentially the story told is that the financial position of European clubs taken as a whole is not improving, and in many cases it is deteriorating. The report does not always present a fully comparable picture with previous years, but here are what I take to be the main points:

No overdues payable: 23 of the 239 clubs participating in either the Champions League (CL) or Europa League (EL) (nearly 10%) had prize money withheld on grounds that they had not met this condition

Breakeven result: 46 (nearly 20%) clubs qualifying for the 2012/13 CL and EL would not have met the requirement compared to only 31 clubs last year.

Going concern: the accounts 106 of 663 top division clubs (16%) included a qualification from the auditors about the commercial viability of the club; this is up from 12% last year

Of these four indicators specified under FFP, only 37% did not breach any of them (down from 44% last season).

Moreover, as the report shows, the opportunity for clubs to make the necessary financial adjustments was there. Over the last 5 years revenues have grown at an average rate of 5.6% per year- if clubs had held spending constant then presumably most clubs could have meet all the criteria comfortably. It must be worrying for UEFA that with the threat of FFP hanging over them, a large fraction of clubs are still unwilling to comply. Maybe these clubs will pull a rabbit out of the hat next year.

If not, then UEFA and the Club Financial Control Body (CFCB) will be in a tricky position. The report talks tough about the action already taken to exclude clubs that breach the conditions, but in truth they have only imposed 37 exclusions over nine years, i.e. four per year. It hardly seems likely they will exclude 37 in one season.

The CFCB clearly has discretion to limit the exclusions to a manageable level, but this is where the fun and games will start. So far the excluded teams have not been able to point to any team treated less rigorously. But if the CFCB tries to set an example of one club while not punishing all, then they will invite claims of unequal treatment. But in they don’t punish anyone then FFP is a dead letter.

More likely they would withhold payments, but then it’s not clear if, say, Manchester City or PSG would care in that case. And as UEFA point out, payments from the CL and EL make up about 17% of revenues for participating clubs and much more for the smaller clubs, so withholding payments could sink some clubs.

So far the clubs seem to be following St Augustine’s prayer – “Lord make me pure but not yet”. UEFA must be praying that the clubs are finally ready to repent their sins.